by James Magnus-Johnston Capitalism and growth might have similar connotations, but they have important distinctions, too. “Capitalism” has become a clumsy catch-all for any number of value-laden projections—greed, big business, innovation, accumulation, complexity, workaholism. “Growth,” meanwhile, is a landmine of technical and cultural connotations, and I’ll explore just a couple of them here. Technically speaking, […]
By Max Kummerow For hundreds of years, economists have debated whether population growth is good or bad. Malthus said exponential population growth increases labor supply, so wages fall until starvation, war, or plague stops growth in numbers. Marx said capitalism causes poverty and hunger, so population growth is good, because “every stomach is born with […]
By Herman Daly
The economic process is not a mechanical analog that can be run forward and backward, nor a circular process that can return to any previous state. Rather it is an irreversible and irrevocable process moving in the direction of time’s arrow of increasing entropy . Finitude and entropy guarantee that the economic life of our species will be a journey of no return. Therefore even a stationary economy, in the classical sense of constant population and constant capital stock, is ultimately a journey of no return, because the metabolic throughput of matter and energy required to maintain constant stocks of people and physical capital, in the face of depreciation and death, is an entropic flow from ever less concentrated sources to ever filling sinks – and both sources and sinks are finite.
Herman Daly explains how we can use prices now as tools for rationing a fixed predetermined flow of resources, rather than determining the volume of resources taken from nature, or the physical scale of the economic subsystem.
Economists are good at making specious arguments in favor of infinite growth. Herman Daly is good at debunking them.
Herman Daly explains Frederick Soddy’s far-reaching economic insight, and he comes up with a doozy of a conclusion.
Good and bads, wealth and illth — economic growth produces them all. But how big are the bads and how damaging is the illth?
Herman Daly wonders how the World Bank got in the business of increasing the debt of poor countries.
You can always count on Herman Daly to ask the critical questions: “How did this nonsense come into economics?”